🔵 Optimism

Optimism is a Layer 2 Optimistic Rollup network designed to utilize the strong security guarantees of Ethereum while reducing its cost and latency

Do you want to know more about Optimism? → 🔗 Read this and this

🔵 Velodrome

Velodrome is an AMM modeled on Solidly and designed to be a public good that provides deep liquidity and low slippage to token pairs critical for the growth of the Optimism ecosystem.

Do you want to know more about Velodrome? → 🔗 Read this

✍️ Description of Work

> In this bounty, we want to examine several different criteria for Health in Velodrome and description for each that showcase traction and success in a data-driven manner

💥 Methodology

In order to evaluate Health for the Velodrome, we look at the following metrics:

• Review and analysis of Number of Swaps, the Volume of Swaps and the Number of Swappers over time
• Review and analysis of Mint, Burn and the Number of Minters on LPs over time
• Review and analysis Balance of Token Pairs in terms of volume in Top Velodrome LPs

To deal with this bounty, we use the optimism.velodrome schema and the ez_swaps and ez_lp_actions tables.

Based on the flipsidecrypto database, we have data for ==Swaps== and ==LPs== on Velodrome from ==Jun 15== onwards

1️⃣ → Review and analysis swaps on Velodrome

☑️ Observations

• Based on the obtained results, you can see that the Number of Swaps, the Volume of Swaps and the Number of Unique Swappers increased from June 15 to June 28, and it reached its peak on June 28, and after that, there was a slight decrease.
• It can be seen that on Aug 5, the Number of Swaps, the Volume of Swaps and the Number of Unique Swappers have decreased drastically and we have seen a 95% decrease in swaps. Now let's check the reason for this:
  • After searching about the reason for the sharp decrease in swaps on Aug 5, we got this news from Velodrome: On August 4, one of Velodrome’s high-value wallets—dedicated to operating funds, such as salaries—was stripped of $350,000. before they could be transferred to the multisig wallet from the company’s treasury funds. A subsequent internal investigation revealed the identity of the attacker, allowing the company to recover all the loot → 🔗 Link to tweet about this incident from Velodrome

So now we have to check how was the status of Swaps in a ==Week Before== this event ==(loss of funds)== and a ==Week After== (for a better comparison)? Have many users left the Velodrome and swaps have dropped significantly?

2️⃣ → Velodrome Swaps analysis a week before and a week after loss funds

☑️ Observations

According to the results obtained from comparing the status of Swaps a week before and a week after losing funds in Velodrome, we come to the conclusion that:

• The Volume of Swaps in a Week Before the loss funds was 405,247,250.9 USD, which decreased to 143,617,867.3 USD a Week After the loss funds, which means that we are witnessing a 64.56%== decrease in the Volume of Swaps.
• The Number of Swaps in a Week Before the loss funds was 317,154, which decreased to 105,098 a Week After the loss funds, which means that we are witnessing a 66.86% decrease in the Number of Swaps.
• The Number of Unique Swappers in a Week Before the loss funds was 15,287, which decreased to 10,433 a Week After the loss funds, which means that we are witnessing a 31.75% decrease in the Number of Unique Swappers.

🧠 Interestingly, although the volume and number of swaps decreased by more than 60% in one week after the loss of funds, the number of swappers decreased by only 30%, which shows that users still trust Velodrome and a slight decrease in the number of swappers can be seen, but they do swaps with a smaller volume and number

3️⃣ → Review and analysis of Mint, Burn and the Number of Minters on LPs over time

☑️ Observations

According to the results obtained from the analysis of Mint (Deposit) and Burn (Withdraw) on LPs in Velodrome, in terms of the Volume of LPs, Liquidity Providers and LPers (Minters and Burners), it can be seen that:

• From June 15 to June 28, the Volume of LPs, Liquidity Providers and LPers (Minters and Burners) have been increasing and the number of Mint was more than Burn, and then it decreased a little and increased again, but still Mint (Deposit) was more than Burn (Withdraw) until Aug 4, when the loss of funds occurred. that on this day the volume of Burn has increased greatly and it is almost 2 times of Mint and due to the negative fund users have withdrawn their liquidity from Velodrome LPs.
• After Aug 5, we again see an increasing trend in Velodrome LPs, the Number of Liquidity Providers and LPers is more for Mint (Deposit), but it is interesting that the Volume of Liquidity Withdrawal or Burn is more than Mint

So now we have to check how was the status of Velodrome LPs in a ==Week Before== this event ==(loss of funds)== and a ==Week After== (for a better comparison)? Have many users Withdrawal Liquidity and Liquidity Providers have dropped significantly?

4️⃣ → Velodrome LPs analysis a week before and a week after loss funds

☑️ Observations

According to the results obtained from the comparison of Mint (Deposit) and Burn (Withdraw) for the Volume of LPs, Liquidity Providers and LPers in a Week Before the loss of funds and a Week After, it can be seen that:

• The Volume of LPs for Mint has decreased drastically and has reached from 60.6M USD to 12.78M USD, which means that we see about 78.91% decrease in the volume of Mint for LPs, while the Volume of Burn in one week after the loss of funds has reached 32.79M USD has arrived, this means that the volume of Burn in one week after the loss of funds was almost 2.5 times the volume of Mints, and users have withdrawn most of their Liquidity from Velodrome LPs.
• The Number of Liquidity Providers for Mint has decreased less than the Volume of LPs and has reached 8663 from17.36K, which means that we are witnessing a 50.87% decrease in the number of Liquidity Providers for Mint, while Liquidity Providers for Burn in a week after the loss of funds has decreased and reached 1776. This means that the number of Liquidity Providers for Mint in a week after the loss of funds was almost 5 times the number of Liquidity Providers for Burn and more users have started Liquidity Providers for Mint.
• The Number of LPers (Minter) for Mint has reached from 2571 to 1761, which means we are witnessing a 31.5% decrease in the number of LPers for Mint, while the number of LPers for Burn (Burner) has decreased in a week after the loss of funds and has reached 1107. It means that the number of LPers for Mint in a week after the loss of funds was almost 1.5 times the number of LPers for Burn, and more users have used Liquidity Providers for Mint.

🧠 After the negative fund that happened for Velodrome on Aug 4, we have seen more ==Volume of Withdraw== from Velodrome LPs, but the number of users ==(Minters)== for Liquidity Providers has decreased less than before and users still trust Velodrome, but they try to use less risk and capital Inject liquidity into LPs

5️⃣ → Balance of token pairs in terms of volume (USD) in ==Top Velodrome LPs

☑️ Observations

> The reason for checking the balance of token pairs in LPs in terms of volume (USD) is that when the volume between tokens in an LP is balanced (the volume of token pairs in LP is equal or has a very small difference), the liquidity power on that LP increases and Trading on these LPs becomes easier and more users do their transactions on these types of LPs, and so called these types of LPs are dynamic.

According to the results obtained from checking the balance of Top LPs in Velodrome, it can be seen that most of the LPs in Velodrome, their pairs of tokens are almost balanced in terms of volume, and only three LPs are not balanced and their token pairs are It is the same that includes:

• USDC/sUSD, USDC/LUSD and WETH/sETH

So, according to this review, we find that the LPs in Velodrome are balanced and users do their transactions with more comfort and confidence on these LPs, which shows that LPs in Velodrome are ==healthy== and ==dynamic==.

6️⃣ → Number of New Swapper and Minter after Loss Funds

✍️ In this section, we want to check another metric to check Health in Velodrome, that is, we want to check how many new Swappers and Minters have entered Velodrome and used it after Loss Funds in Velodrome. Of course, considering that we have the data from 2022-06-15, there may be some error because users may have used it before 2022-06-15 and we include them in the new Swapper and Minter in We will comment, but it is important to know whether there are really new users after Loss Fund or not?

☑️ Observations

• It can be seen that from 2022-06-15 until now, the total number of Swappers is 27560, of which 5375 swapped after Loss Funds in Velodrome, which means 19.5% of the total number of Swappers after Loss Funds they have done a swap.
• Also it can be seen that from 2022-06-15 until now, the total number of Minter is 6777, of which 1323 minted after Loss Funds in Velodrome, which means 19.5% of the total number of Minter after Loss Funds they have done a mint.

✔️ Final Conclusion

After reviewing several metrics to measure Health in Velodrome, which included checking the status of swaps, LPs, LPs tokens balance and New Users (Swapper and Minter), I came to the conclusion that the Volume and Number of Swaps in Velodrome decreased significantly (about 65%) after the occurrence of Loss Funds and it started increasing again, but the Number of Swappers did not decrease significantly and only decreased by 30%. Also, the same situation existed for Minters and Liquidity Providers in Velodrome LPs, and considering that after Loss Funds, the Volume of Burn (withdrawn) in LPs It became more than Mint (Deposit) and users withdrew their liquidity from LPs, but the Number of Minters and the Number of Liquidity Providers did not decrease significantly, which shows that users still trust Velodrome and did not cause them to lose their users, which shows Trust and Health in the Velodrome. Also, after checking the balance of the token pairs in terms of volume (USD) in Velodrome LPs, we came to the conclusion that most of the LPs in Velodrome are balanced, which makes LPs dynamic and highly liquid. This makes it easy for users to use Velodrome LPs, which shows the Health of Velodrome. Also, after checking the New Swappers and Minters after Loss Funds, we came to the conclusion that from 2022-06-15, about 20% of all users (Swapper and Minter) have done Swap or Mint in Velodrome after Loss Funds and have not had any Swap or Mint before Loss Funds. This also shows that after Loss Funds, new users have started using Velodrome and Velodrome is still alive and strong and continues to grow and is in good health :slightly_smiling_face:.